Notice2025-20392
Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Partial Amendment No. 1 to Proposed Rule Change To Establish a New Collateral-in-Lieu Offering Within the Sponsored GC Service, and Expand the Sponsored GC Service To Allow a Sponsoring Member To Submit for Clearing a “Done-Away” Sponsored GC Trade
Primary source
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Published
November 20, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 222 (Thursday, November 20, 2025)</title>
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[Federal Register Volume 90, Number 222 (Thursday, November 20, 2025)]
[Notices]
[Pages 52466-52467]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-20392]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104193; File No. SR-FICC-2025-019]
Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing of Partial Amendment No. 1 to Proposed Rule Change To
Establish a New Collateral-in-Lieu Offering Within the Sponsored GC
Service, and Expand the Sponsored GC Service To Allow a Sponsoring
Member To Submit for Clearing a ``Done-Away'' Sponsored GC Trade
November 17, 2025.
On August 29, 2025, Fixed Income Clearing Corporation (``FICC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change SR-FICC-2025-019 pursuant to Section 19(b) of the
Securities Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
\2\ thereunder to modify FICC's Government Securities Division
(``GSD'') Rulebook (``GSD Rules'') \3\ to establish a new Collateral-
in-Lieu (``CIL'') offering (``CIL Service'') within the Sponsored GC
Service to allow a Sponsoring Member to submit for clearing a ``done-
away'' Sponsored GC Trade. The proposed rule change was published for
public comment in the Federal Register on September 15, 2025.\4\ The
Commission has received no comments regarding the substance of the
proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The GSD Rules are available at https://www.dtcc.com/~/media/
Files/Downloads/legal/rules/ficc_gov_rules.pdf. Terms not otherwise
defined herein are defined in the GSD Rules or in the proposed rule
change.
\4\ See Securities Exchange Act Release No. 103940 (Sept. 10,
2025), 90 FR 44408 (Sept. 15, 2025) (File No. SR-FICC-2025-019)
(``CIL Service Notice of Filing'').
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On September 30, 2025, pursuant to Section 19(b)(2) of the Exchange
Act,\5\ the Commission designated a longer period within which to
approve, disapprove, or institute proceedings to determine whether to
approve or disapprove the proposed rule change.\6\
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\5\ 15 U.S.C. 78s(b)(2).
\6\ Securities Exchange Act Release No. 104085 (Sept. 26, 2025),
90 FR 46981 (Sept. 30, 2025) (File No. SR-FICC-2025-019).
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On September 29, 2025, FICC filed Partial Amendment No. 1 to the
proposed rule change.\7\ Pursuant to Section 19(b)(1) of the Act \8\
and Rule 19b-4 thereunder,\9\ the Commission is publishing notice of
this Partial Amendment No.1 to the Proposed Rule Change as described in
Item I below. The Commission is publishing this notice to solicit
comments on Partial Amendment No. 1 from interested persons.
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\7\ Text of the proposed changes made by the Partial Amendment
No. 1 to the proposed rule change is available at <a href="https://www.sec.gov/comments/sr-ficc-2025-019/srficc2025019-664907-1986975.pdf">https://www.sec.gov/comments/sr-ficc-2025-019/srficc2025019-664907-1986975.pdf</a>. The proposed rule change, as modified by Partial
Amendment No. 1, is hereinafter referred to as the ``Proposed Rule
Change.''
\8\ 15 U.S.C. 78s(b)(1).
\9\ 17 CFR 240.19b-4.
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I. Summary of the Terms of Substance of Partial Amendment No. 1 to the
Proposed Rule Change
FICC filed Partial Amendment No. 1 to its previously submitted
proposed rule change, which would make several changes to FICC's GSD
Rules to (1) establish a new Collateral-in-Lieu offering within the
existing Sponsored GC Service, and (2) expand the Sponsored GC Service
to allow a Sponsoring Member to submit for clearing a done-away
Sponsored GC Trade (i.e., a Sponsored GC Trade between its Sponsored
Member and either a Netting Member other than the Sponsoring Member or
another Indirect Participant of any Netting Member). As described more
fully in the CIL Service Notice of Filing, the proposal would increase
the ability of registered investment companies and other cash providers
to access FICC's clearance and settlement system for repurchase
transactions by using a lien in favor of FICC on Purchased GC Repo
Securities, thereby reducing the margin and capital costs on
intermediaries providing clearance and settlement services to such
market participants.\10\ As initially proposed in the CIL Service
Notice of Filing, Sponsored GC CIL Trades would be addressed in the
then-current GSD Rule 3A, including the provisions regarding
liquidation of Sponsored Member and related Sponsoring Member
positions.\11\
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\10\ CIL Service Notice of Filing at 44409, supra note 4. The
lien granted by the CIL Funds Lender to FICC would service to
eliminate ``double margining'' by largely obviating the need for
FICC to collect initial margin with respect to a Sponsored GC CIL
Trade. Id. The lien would allow FICC to use the Purchased GC Repo
Securities to complete settlement with the . . . GC Funds Borrower .
. . in the event the CIL Funds Lender or its Sponsoring Member
defaulted. Id. As a result, it would, with limited exceptions,
eliminate the need for FICC to collect initial margin to address the
risk that the CIL Funds Lender fails to deliver such securities. Id.
\11\ CIL Service Notice of Filing, supra note 4.
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However, as detailed below, after the CIL Service Notice of Filing,
FICC amended a separate pending proposal that would change the GSD Rule
3A liquidation provisions applicable to Sponsored GC CIL Trades.
Accordingly, Partial Amendment No. 1 to the Proposed Rule Change would
make conforming changes to the GSD Rule 3A liquidation provisions for
consistency with the separate pending proposed rule change that FICC
amended after the CIL Service Notice of Filing.
Specifically, on June 6, 2025, FICC filed with the Commission
proposed rule change SR-FICC-2025-015 to enhance and clarify FICC's
default management rules as they apply to the Sponsored Service and
Agent Clearing Service, and to facilitate the porting of indirect
participant activity from one intermediary Netting Member to another
intermediary Netting Member.\12\ On September 16, 2025, FICC filed
Amendment No. 1 to the Default Management Proposed Rule Change, which
would change, among other things, GSD Rule 3A to (1) include express
language regarding the ability of a Sponsoring Members or FICC to
liquidate an indirect participant's done-away positions, and (2)
describe two ways that a Sponsoring Member may liquidate done-away
transactions.\13\
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\12\ Securities Exchange Act Release No. 103282 (June 17, 2025),
90 FR 26656 (June 23, 2025) (File No. SR-FICC-2025-015) (``Default
Management Proposed Rule Change'').
\13\ Securities Exchange Act Release No. 104001 (Sept. 18,
2025), 90 FR 45850 (Sept. 23, 2025) (File No. SR-FICC-2025-015).
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As stated above, proposed rule change SR-FICC-2025-019 would
establish the CIL Service and enable Sponsoring Members to submit done-
away Sponsored GC Trades. At the time FICC initially filed the Default
Management Proposed Rule Change, the applicability of Section 18(a) and
(b) of GSD Rule 3A
[[Page 52467]]
(re-numbered as Section 16 under the Default Management Proposed Rule
Change) were limited to done-with transactions. FICC's amendment to the
Default Management Proposed Rule Change would apply those sections of
GSD Rule 3A to done-away transactions as well. Additionally, FICC's
amendment to the Default Management Proposed Rule Change would add
Section 18(c) to GSD Rule 3A (re-numbered as Section 16 under the
Default Management Proposed Rule Change) to address two ways that a
Sponsoring Member may liquidate done-away transactions. However, FICC's
amendment to the Default Management Proposed Rule Change did not
specifically address Sponsored GC CIL Trades in Sections 18(a)-(c) of
GSD Rule 3A (re-numbered as Section 16 under the Default Management
Proposed Rule Change).
Accordingly, Partial Amendment No. 1 to the Proposed Rule Change
would make relevant changes to GSD Rule 3A for consistency with the
amended Default Management Proposed Rule Change. Partial Amendment No.
1 to the Proposed Rule Change would revise Section 18(a) of GSD Rule 3A
(re-numbered as Section 16 under the Default Management Proposed Rule
Change) to clarify the section's applicability to both done-with and
done-away transactions, including Sponsored GC CIL Trades if the
Corporation has not exercised its rights set forth in Section 13(e) of
Rule 3A. Additionally, Partial Amendment No. 1 to the Proposed Rule
Change would add appropriate references in Sections 18(b) and (c) of
GSD Rule 3A (re-numbered as Section 16 under the Default Management
Proposed Rule Change) to Sponsored GC Trades, Sponsored GC CIL Trades,
and Sponsored GC CIL Omnibus Account.
Partial Amendment No. 1 would not change the purpose of, or
statutory basis for, the proposed rule change. All other
representations in the proposed rule change remain as stated therein
and no other changes are being made.
II. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#92e0e7fef7bff1fdfffff7fce6e1d2e1f7f1bcf5fde4"><span class="__cf_email__" data-cfemail="3d4f485158105e5250505853494e7d4e585e135a524b">[email protected]</span></a>. Please include
file number SR-FICC-2025-019 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549.
All submissions should refer to File Number SR-FICC-2025-019. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549 on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of FICC and on DTCC's
website at (<a href="https://dtcc.com/legal/sec-rule-filings.aspx">https://dtcc.com/legal/sec-rule-filings.aspx</a>). Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to File Number SR-FICC-2025-019 and should be
submitted on or before December 5, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(31).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-20392 Filed 11-19-25; 8:45 am]
BILLING CODE 8011-01-P
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